News Comments
- Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M.
- Today’s main analysis: International P2P lending volumes for January 2019.
- Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. 8 U.S. challenger banks traditional banks should be scared of. Due diligence on P2P platforms. Global regulators struggle to define fintech credit.
United States
- KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. The lowest rating is a BBB, highest AAA. No surprises, really.
- Where we are in the credit cycle. Traditional banks are happy with where things are. Also includes a roundup of some big news in the alternative lending sector, including Acorns’ huge raise of $105 million.
- How the industry responds to the FDIC small dollar lending rule request. Both the Marketplace Lending Association and the Online Lenders Alliance issue statements. Included: The statement from the Online Lenders Association. A must-read.
- LendingPoint increases mezzanine financing to more than $67.5 million.
- 8 challenger banks traditional institutions should be afraid of. There are way more challenger banks than this, but these are the bigger ones. SoFi Money is one of the late comers, but with its financial strength, it should be a contender. Down below, don’t miss the interview with Joust, which is not on this list.
- Joust interview: The bank for freelancers.
- Chime tries to disrupt American banking.
- Challenger bank Rising Bank sets up in Midwest.
- P2P Global sells U.S. loans.
- Molo offers 15-minute mortgages.
- 25% say money is biggest hurdle in running a business.
- Plaid, Quovo scratch the surface of data aggregation.
- PeerLoanAdvisor intros loan ratings for P2P lending investors.
- Dharma Labs offers blockchain lending.
- CashCall class action will need to be refiled.
- LendingHome named to Forbes Fintech 50.
- PeerStreet integrates with Liquid Logics.
- Fluent appoints new chief financial officer.
- CoreLogic launches enhanced title, closing solution for lenders.
- Custody firm backing Betterment, Stash to launch crypto custody service.
United Kingdom
- Due diligence on P2P platforms. Are things going to get tougher for UK P2P lenders?
- Open Banking guidelines are offered.
- Starling Bank launches euro accounts.
- Aire raises $11 million.
- AccountScore offers real-time financial advice with Open Banking.
- Is SMEs declining external investments a barrier to scale?
- ANNA gets 8.5 million GBP in funding.
- Celsius has issued $630 million in crypto loans in six months.
- Aave launches Bitcoin lending on ETHLend.
- UK Bond Network closes doors.
European Union
- Raisin raises $114 million.
- ING offers Dutch SMBs funding options.
- NOVA disrupts P2P lending in Ireland.
- Banco BNI Europa, NDGIT accelerate Open Banking, PSD2.
International
- P2P lending volumes for January 2019. RateSetter crossed over 3,000 million GBP. Zopa crossed 4,000 million GBP.
- Regulators struggle to define fintech credit.
- Why venture capital is the answer to falling returns.
- Can technology stop the unbanked from falling through the cracks?
- Sancus to accept euros, dollars for loan funding.
- Revolut partners with WeWork.
Other
- China: CreditEase offers social lending to farmers.
- Australia: Wisr launches ad campaign toward disillusioned big bank customers.
- Malaysia: Youth urged to diversify P2P lending investments.
- Canada: Vancouver-based crypto trading platform with lending features launches.
- Africa: DexAge offers versatile crypto trading and includes lending.
News Summary
- United States
- KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA
- Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA
- The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA
- LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA
- Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA
- P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A
- 15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A
- Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A
- 1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A
- Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A
- Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A
- US challenger Rising Bank rises up in Midwest (Fintech Futures), Rated: A
- PeerLoanAdvisor.com Introduces Exclusive Loan Ratings for Peer to Peer Lending Investors (PRWeb), Rated: A
- California-based blockchain lender proves attractive to investors (CoinGeek), Rated: A
- Long-running CashCall class action headed to state court (Reuters), Rated: A
- LendingHome Named to Forbes Fintech 50 List for Second Consecutive Year (Business Wire), Rated: B
- PeerStreet Announces New Software Integration with Liquid Logics (PeerStreet), Rated: B
- Fluent, Inc. Appoints Alex Mandel as Chief Financial Officer (Globe Newswire), Rated: B
- CoreLogic Launches Enhanced Title and Closing Solution for Lenders (CoreLogic Email), Rated: B
- A fintech firm backing hot robo advisors like Betterment and Stash is planning to launch crypto custody services within the next few months (Business Insider), Rated: B
- United Kingdom
- Due diligence on P2P platforms (FT Adviser), Rated: AAA
- UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA
- Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A
- Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A
- AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A
- Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A
- SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A
- What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A
- Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A
- Exclusive: P2P firm shuts platform (AltFi), Rated: B
- China
- From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA
- European Union
- PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA
- ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A
- The Irish fintech startups disrupting their industries (Irish Times), Rated: A
- Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A
- International
- International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA
- Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA
- Why VC Is The Answer To Falling Returns (Forbes), Rated: A
- Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A
- Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A
- Revolut team ups with WeWork (AltFi), Rated: B
- Australia
- Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A
- APAC
- Diversify investments in P2P lending, youths urged (The Star), Rated: AAA
- Africa
- DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA
- Canada
- Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA
United States
KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.
Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1 |
||||||||
Class | Preliminary Rating | Class Principal | ||||||
A | AAA (sf) | $351,800,000 | ||||||
B | AA+ (sf) | $39,400,000 | ||||||
C | A+ (sf) | $51,500,000 | ||||||
D | BBB (sf) | $38,000,000 |
Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA
This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.
The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.
Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here). Marlette announced another year of profitability in 2018.
Overall, lenders view the US consumer as healthy and the US economic growth as solid.
The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA
So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.
There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.
The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:
The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.
The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.
Read the full Online Lenders Alliance response here.
LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA
LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.
Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.
Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA
1. BankMobile — Hooked Up With T-Mobile
Parent Company: Customers Bank
Website: www.bankmobile.com
Launched: 2015
Category: Mobile bank
The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.
2. Chime — Super Slick App
Website: www.chimebank.com
Launched: 2013
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships
3. Finn — Chase Bank’s Millennial Play
Parent Company: JPMorgan Chase
Website: www.chase.com/personal/finnbank
Launched: 2017
Category: Mobile bank
Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).
4. Marcus — Sucking Up Your Customers
Parent Company: Goldman Sachs
Website: www.marcus.com
Launched: 2016
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.
Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).
5. N26 — Platform Maestro
Website: n26.com
Launched: 2015
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.
6. Revolut — The Amazon of Banking
Website:www.revolut.com:
Launched: 2015
Category: Mobile financial provider
Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.
7. SoFi Money — Join The ‘Waitlist’
Parent Company: Social Finance, Inc.
Website: www.sofi.com
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account
8. Varo Money — Almost OCC Approved
Website: www.varomoney.com
Founded: 2015
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.
Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”
P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A
It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.
15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A
Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.
Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A
57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.
1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A
Key Findings
- 1 in 4 Americans considers funding to be the biggest obstacle.
- More women say not knowing how to run a business is a challenge than men.
- Millennials ages 25 to 34 are the most afraid of failure.
- 1 in 3 Americans lacks a strong business idea to begin with.
Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A
The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an
With fintechs getting access to customers data residing at different banks and investment firms, the tie-up between Plaid and Quovo is seen as the early signs of the next wave of fintech disruption. These startups will not only help fintechs aggregate data but analyze it as well. That’s according to David Jegen, a partner at F-Prime Capital, an early stage venture fund based in Boston that co-led the Series B round of fundraising for Quovo. He said the industry has rapidly shifted from a time when no one beyond financial advisors gave much thought to aggregating all of a customer’s’ financial data to it now becoming expected. Just ask a millennial who wants to easily access their data from their bank account on a mobile trading app.
Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A
United Kingdom
Due diligence on P2P platforms (FT Adviser), Rated: AAA
In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.
UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA
The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.
With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.
Read the full report here.
Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A
The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.
Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A
Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.
AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A
A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.
The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.
Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A
Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.
SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A
SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.
What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A
The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.
Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.
Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A
AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.
Exclusive: P2P firm shuts platform (AltFi), Rated: B
The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.
China
From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA
Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?
European Union
PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA
German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.
ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A
Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday (Feb. 4).
The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.
The Irish fintech startups disrupting their industries (Irish Times), Rated: A
Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.
Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A
The European challenger bank in Portugal, Banco BNI Europa, has become a customer of NDGIT, provider of the API platform for banking and insurance in Europe.
BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.
International
International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA
Milestones achieved this month (total volume since launch):
- MyTripleA crossed 50M EUR
- Peerberry crossed 50M EUR
- Ratesetter crossed 3000M GBP
- Swaper crossed 50M EUR
- Zopa crossed 4000M GBP
Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA
While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.
Why VC Is The Answer To Falling Returns (Forbes), Rated: A
In uncertain times, VC offers the advantage that its performance is completely uncorrelated with public equity markets. Last year, both the US and Europe saw record VC investment, reaching over
Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A
Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.
In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.
TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.
Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A
SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.
The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.
Revolut team ups with WeWork (AltFi), Rated: B
The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.
Australia
Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A
Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.
APAC
Diversify investments in P2P lending, youths urged (The Star), Rated: AAA
Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.
To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.
Africa
DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA
The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.
Canada
Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA
iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.
iBank Products & Services:
Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.
Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.
Authors:
The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.
Thursday January 17 2019, Weekly News Digest
News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]
The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.
News Comments
- Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers.
- Today’s main analysis: Marketplace lending securitization slowed in Q4 2018.
- Today’s thought-provoking articles: Consumer credit continues to grow. Loan default rates rose in December. India’s crowdfunding platforms gain traction with blockchain, artificial intelligence. Most competitive U.S. housing markets.
United States
- SoFi Money bank-like services. SoFi Money has started sending out its emails to early sign-up prospects and here’s what’s on the table.
- SoFi’s next student loan securitization to focus on more MDs, fewer residents.
- LendingClub selected for Bloomberg Gender-Equity Index. Congratulations.
- Marketplace lending securitization slowed in Q4 2018. This was simply a slowdown. There were still MPL securitizations, but it’s unclear as to why the slowdown. Could it have something to do with interest rates? Probably. We’ll know for sure if we see continued declines.
- Consumer credit continues to grow. That’s a good thing.
- Loan default rates rose in December. Is this a signal that we are entering a recession? Something to keep an eye on.
- The most competitive housing markets. A LendingTree report.
- Fiserv to acquire First Data.
- Roostify enables digital mortgage solution for Glacier Bancorp.
- Joust launches digital bank for gig economy.
- Snoop Dogg invests in Klarna.
- Alternative lending among the trends to dominate business in 2019.
- 6 personal loan lenders that accept cosigners.
- What happens to robo advisors in a downturn?
- LendIt’s white paper on SMB banking.
- White Oak Healthcare Finance provides facility for senior living acquisition.
- FundThrough to work with 919 Marketing on U.S. expansion.
- Fed not an obstacle to fintech charter.
United Kingdom
- RateSetter surpasses 3 billion GBP in lending. As the industry continues to grow, so do the largest players in the UK and the U.S. Alternative lending is still healthy.
- Celebrities to join Zopa hotline for a day.
- Tandem Bank considers IPO.
- Tide, ClearBank partner.
- One fourth of UK consumers will have neobank account in five years.
- Arbuthnot Commercial Asset-Backed Lending supports MBO of Plumbworld.
- BBVA could take over Atom Bank.
- Who accountants recommend to their clients.
International
- Kabbage to provide point-of-sale loans to Alibaba customers. A huge feather in the cap for Kabbage and puts them squarely in competition with Klarna and Affirm.
- White Oak Global Advisors surpasses $2.5 billion in loan originations. Congratulations.
- Klarna links with Daniel Wellington.
Other
- Latvia: Robo.cash doubles new investors in 2018.
- China: HeZhong International to IPO on Nasdaq.
- India: Crowdfunding platforms get traction from blockchain, artificial intelligence.
- China: HeZhong sees 3,330% revenue growth.
- Europe: Investments steady but deal flow dives.
- Ireland: Money for poverty could use better systems.
News Summary
- United States
- SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA
- More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A
- LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA
- Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA
- Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA
- Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA
- Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A
- LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA
- Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A
- Joust launches a digital bank for gig-economy workers (American Banker), Rated: A
- Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A
- 2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A
- 6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A
- What happens to robos in a downturn? (Financial Planning), Rated: A
- SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A
- White Oak Healthcare Finance Provides Facility to Support GMF Capital and Meridian Senior Living’s Acquisition of Rhode Island Assets (BusinessWire), Rated: B
- FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B
- Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B
- United Kingdom
- RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA
- Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA
- UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A
- Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B
- A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A
- ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A
- BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B
- Accountants Look Out (Fintech Finance), Rated: B
- China
- HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA
- HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A
- European Union
- Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA
- Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A
- Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A
- International
- Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA
- White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A
- Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B
- India
- Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA
United States
SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA
Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:
- No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
- Higher interest rates, a “whopping” 2.25% APY on your money.
- Free ATM usage as SoFi will reimburse the fees.
- Mobile first as your phone is your [bank] branch.
- Secure – Accounts are FDIC insured up to $1.5 million.³
More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A
Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.
Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.
LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA
LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.
Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA
Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.
We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.
Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA
Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.
Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA
According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.
What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.
Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A
A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.
LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA
Key Findings:
Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.
Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.
Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A
Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.
Joust launches a digital bank for gig-economy workers (American Banker), Rated: A
The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.
The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.
Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A
Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.
Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.
2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A
1. Consumers demand data control: a Deloitte report shows 71% of purchased data is … inaccurate.
2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.
6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A
Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.
- Freedom Plus
- Laurel Road
- Lending Club
- Lightstream
- OneMain Financial
What happens to robos in a downturn? (Financial Planning), Rated: A
As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.
“It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.
SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A
- How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
- Who are emerging SMB-focused fintech companies and partnerships to watch
- What banking functions and features are most sought after by SMBs
- How mobile apps are being designed specifically with SMB customers in mind
- Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B
FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.
Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B
Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.
Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.
United Kingdom
RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA
UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.
RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.
Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA
PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.
It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.
Boxing icon Frank Bruno will also be on the hotline.
UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A
UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.
In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.
Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B
Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.
Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition.
A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A
Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.
ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A
Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.
BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B
BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.
Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.
Accountants Look Out (Fintech Finance), Rated: B
Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).
China
HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA
The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.
On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.
HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A
- Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
- Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
- The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
European Union
Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA
LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.
The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.
Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A
Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.
The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.
In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.
Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A
On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.
While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.
Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.
International
Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA
Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.
Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.
White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A
White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.
Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B
Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.
India
Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA
Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.
A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.
Authors:
The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.